Mass. regulators to review Beth Israel Lahey Health merger’s impacts
The Massachusetts Health Policy Commission voted Thursday to conduct a comprehensive review of the impacts of the 2019 merger that formed Beth Israel Lahey Health, the state’s second-largest health system.
The cost and market impact review, which the state Department of Public Health requested in May, will examine the health system’s impacts on health care spending, market dynamics, and quality and accessibility of care. It comes as an unprecedented provision limiting cost increases at Beth Israel Lahey Health approaches its expiration date.
“This review will give the public an opportunity to consider the extent to which BILH has been able to achieve its goals of promoting market competition, expanding access to community-based services, and improving quality across providers in its system,” HPC executive director David Seltz said in a news release.
The anticipated timeline of the review is 185 days from when Seltz sends formal notice to the health system, which is expected to occur by the end of June.
The merger that formed Beth Israel Lahey Health included an unprecedented guarantee that increases in the new health system’s prices charged for services would remain below the state’s benchmark for the system’s first seven years of operation. Those seven years will be up at the end of February 2026.
The price cap was one of several constraints put on the merger to address regulators’ concerns that the Beth Israel Lahey Health system would be costly and inaccessible for low-income patients. The hospitals involved in the merger served relatively few low-income patients receiving Medicaid.
A cost and market impact review, which typically takes about six months, is a comprehensive process the Health Policy Commission has previously used to determine potential impacts ahead of a major change to the Massachusetts health care landscape, such as the merger forming Beth Israel Lahey Health. That review in 2018 projected significant cost increases, fueling the concerns that resulted in constraints such as the price cap. Thursday’s vote marks the first time the agency will use this process retrospectively.
Submitting to such a review, which will rely on data and confidential information from Beth Israel Lahey Health, was also a requirement of the merger.
Reached for comment, a BILH spokesperson wrote: “We are proud of our commitment to sustaining and expanding access to extraordinary care throughout our communities and to meeting our obligations to the state; we look forward to working with the HPC in the months ahead on this review.”
Stella Tannenbaum can be reached at [email protected].
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